Calls for a review of rates as residents get vocal on valuations

Hobsons Bay City Council has sent its yearly rates notices to residential and commercial property owners, prompting some locals to become vocal on valuations amid reports of rates being increased by almost 50 percent for some residents.

“As a resident of Williamstown, I have just received my rates notice. I am absolutely disgusted at the increase in charges and the ridiculous jump in the Site Value and Capital Improved Value,” said one resident.

“Just because our home has increased in value, how does that justify paying such high rates? We did not get pay increases to support these increases and what business is it of a council the value of our home.”

“To pay more than $50 per week is ridiculous. To have a system that tries to profit off a person’s own prime residence is shameful. If I was single, and on a pension, this would almost be a quarter of my annual income and potentially force me out of my home.”

The local resident believes a fairer system could potentially be a flat fee per person living in an area, whereby the same fee would apply for everyone, albeit some discounted rates for seniors and pensioners.

“Everyone who lives in the community should contribute, however, just like we pay to get on the train (set fees with a couple of discounted rates), or if I choose to access Netflix – same rate for everyone to enjoy, so should be our rates.”

There are calls for a review of rates as local residents get vocal on valuations from recent rates notices issued.

In a statement to Willy and Hobby, Hobsons Bay City Council said if ratepayers are unsure of their rates notices, they should “call Council’s Valuer on 9932 1000 and then complete an objection form.”

For ratepayers who have a genuine grievance, there certainly does not appear to be any harm done by completing an objection form. In fact, if previous years’ objections are anything to go by, objections appear to have the potential of paying great dividends.

Willy and Hobby can reveal that in 2017-18, Hobsons Bay City Council received 33 residential objections (from a total of 38,283 residential rates notices issued) in regard to property valuations.

Sixteen of these objections were successful. One of the successful residential objections resulted in a rate reduction of $1197.65. This reduction was in proportion to the property having a higher valuation. The average rate reduction was $370.85.

Willy and Hobby can also reveal that in the same year, Council received 14 commercial objections (from a total 3,022 commercial rates notices issued) in regard to property valuations.

Seven of these objections were successful. One of the successful commercial objections resulted in a rate reduction of $1,292.21. This reduction was in proportion to the property having a higher valuation. The average reduction was $465.95.

While the average general rate increase is currently capped at 2.25 per cent across all properties rates, individual rates vary according to property values, which up until now have been subject to revaluation every two years.

The most recent revaluation was carried out in January this year, with properties valued by independent valuers and certified by the valuer-general. Though from 2019, valuations will be conducted annually with the valuer-general to be the sole valuation authority by 2022.

The phasing out of independent valuations is one-of-a-raft of recent changes to rates, though there are calls for a review after a State Government inquiry published in December 2017 found that there were some ‘inequitable aspects’ to the current rating system.

“There is a need for a new approach to funding councils. Rates are an appropriate source for a portion of councils’ revenue. However, there are some inequitable aspects to the current rating system,” the inquiry’s report states.

“The current rating system does not always reflect the capacity of an individual to pay, as it measures capacity through property ownership, which does not necessarily reflect available income.”

“The rating system should therefore be reviewed, with a view to improving its fairness and equity. At the same time, it is important to increase funding from other sources, so that councils’ dependence on rates can be reduced.”

The inquiry also found many other systemic problems affecting council finances, including increasing compliance requirements, changing regulations, council decisions to take on additional responsibilities and growing demand and expectations from the community.

Though as councils face increasing expenses, they also face the prospect of further cuts to their revenue base, with a proposed bill in State Parliament aiming to restrict municipal charges from 20 to 10 per cent of a council’s total rates revenue.

The state’s representative body for councils, Municipal Association of Victoria, has called for a review of the rates system. Its chief executive Rob Spence also thinks continued pressures on councils would ultimately force councils to change the way they operate.

“We are going to be, I think, in a situation in the next few years, brought on by rate capping and financial assistance grants clamps and so on, that is going to force change in the way councils actually do business,” Mr Spence said.

“You will see the back ends of the business become shared services, a number of councils clustered together to provide the administration and resources necessary to deal with the governance entities, maybe four or five governance entities with a shared service.”

Increased pressures on the number of pennies in the public purse might also raise questions about the catalogue of community services beyond ‘roads and rubbish’ that are currently on offer from some Victorian councils.